LAKE FOREST – Mayor Peter Herzog said the proposals presented by Gov. Jerry Brown this week to address the state’s $25.4 billion shortfall leave more questions than answers, appear inconsistent and contradict what voters said they want.

Brown, who unveiled his plan on Monday, is proposing to slash $12.5 billion in state spending, which he hopes will spur voters to approve in June a five-year extension of temporary taxes enacted under Arnold Schwarzenegger to cover the rest of the budget gap.

Brown also is proposing to restructure the state’s relationship with local governments, calling for reversal of “a 30-year trend that has seen decision-making and budget authority move from local government to the State Capitol,” in the words of Brown’s budget staff. However, it is Brown’s proposal to phase out redevelopment agencies that is most perplexing to Herzog.

Redevelopment agencies are created by counties and cities to fund projects on private and public property deemed blighted. They do that by using future property tax gains from properties in a redevelopment area. Projects are funded through bonds, and the incremental tax gains on redeveloped property go to pay off those bonds and to pursue other projects.

Funds in a city’s redevelopment agency budget can’t be comingled with a city’s general fund. That loss of revenue to the city’s budget, Brown said, leads cities to turn to the state for backfill – though Lake Forest does not make such requests, Herzog said. Brown is proposing to phase out redevelopment agencies so cities can reap the property tax revenue that goes to redevelopment agencies.

Herzog said that doesn’t make sense for Lake Forest. The city’s general fund benefits from the increased sales taxes when commercial/shopping areas are revitalized, and the increased property tax remains within the redevelopment budget.

“The net effect is that Lake Forest can retain a larger portion of property tax then would otherwise be the case,” Herzog said.

Herzog also said the proposal seems inconsistent with Brown’s plan to reestablish local control.

“He claims he wants to get more power in the cities, but the first thing he wants to do is take away the redevelopment agencies,” Herzog said. “In November, the voters by more than 60 percent voted to protect the redevelopment agencies – that was two months ago. The voters have already spoken. Now we’re going back in June and revote? He is inconsistent with what voters said.”

Proposition 22 passed in the last election with a 61.4 percent yes vote. The proposition prohibits the state, even during severe fiscal hardship, from borrowing or taking funds used for transportation, redevelopment, or local government projects and services, according to the Secretary of State website.

In Lake Forest, the El Toro redevelopment area is roughly bound by the I-5, Los Alisos Boulevard, Trabuco Road and the commercial properties on El Toro Road. The 856 acres were designated as a redevelopment area by the county in 1988. The designation has allowed the city to revitalize public infrastructure in the area and remove obstacles to private investment in the commercial and shopping district along El Toro from the freeway to Muirlands Boulevard, according to the city’s website.

Herzog said the city will have to spend some time analyzing the governor’s proposals and considering what effects they may have. At first glance, he said, affordable housing – also an element of redevelopment – and improvement projects in the El Toro redevelopment area could suffer. Brown’s proposals also leave the city with a budget planning conundrum, Herzog said.

“Do we prepare a budget with the redevelopment agency or without?” he said. “We obviously have a lot of work to do. There’s a lot of information to go through even in the 200-page summary (of Brown’s budget). It’s very complicated, and we’ll have to take time to sort it out.”

Erika Ritchie reports on South Orange County coastal communities, military issues and Camp Pendleton for the OC Register. She explores everything from coastal access, environmental issues and marine life to city government, animal welfare and quality of life. She’s won many awards including first place in news (2016) by the Orange County Press Club for her coverage of record numbers of whale entanglements off the California coast. Erika’s covered military change of command and seen military affairs firsthand from the sea aboard a battleship, air from a MV-22 Osprey, and land including Pendleton’s International war games and San Clemente Island’s ordnance ranges. Journalism allows Erika’s penchant for telling human stories of conflict, struggle and joy. Her monthly Everyday Hero feature does just that, highlighting achievements of some of Orange County’s most dedicated volunteers and non-profit leaders. Since joining the Register in 2001, she’s at times covered every city in South Orange County delving into development, housing, transportation, county government and social issues. She’s often written about Saddleback Church and Pastor Rick Warren’s emerging national and global roles. Erika’s passionate about animals and outdoor adventure. She runs, stand-up paddles and skis - both alpine and x-country. She frequents Mammoth Lakes and Mountain for hiking, biking & skiing and for her dogs to frolic in the snow and lakes. She grew up bilingual in German and conversational in French.

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